The question of whether to save or spend miles takes on new urgency this year as lawmakers consider Credit Card Competition Act, The law targets transaction fees — typically 2 to 3 percent of sales — that retailers pay to credit card companies like Visa and MasterCard. The fee is partly used by companies to run loyalty programs that provide cardholders with points that can be redeemed for things like flights and hotels.
The Act proposes to allow retailers to choose a cheaper system which would reduce charges. Critics, including Banks and Airlineswho make billions selling co-branded credit cards, maintaining an affordable system that is backed by retail Giants like Walmart and Target will discontinue rewards programs.
Whether the law will be successful is unknown.
“This has been one of the biggest lobbying battles ever, pitting two giant industries, retail versus banking, against each other,” said Brian Kelly, founder of the American Financial Services Ltd. point guyA travel site that helps users maximize reward points opposes Act.
Does the law put your issues at risk? Not immediately, Leigh Rowan said Savanti Yatra, a personal travel management service. “Assuming it passes, we still have a long way to go until and when the bill is enacted,” he said. “There’s no rush to do anything in 2024.”
Still, experts always recommend spending more than saving points.
“Never hoard,” Mr. Kelly said, explaining that airlines and hotels have the flexibility to change their redemption values overnight, and to maintain the growth of points, they may choose to obtain flights or hotel rooms. Let’s increase the total amount required. “Over time, the points you have today typically lose value.”
Mr. Rowan suggests diversifying your credit cards by switching from an airline card, for example, where you can only redeem points with that airline, to a more robust card like the Chase Sapphire Preferred Card that has deals with multiple airlines, hotels and There are redemption partnerships with rental car companies.
“Diversification will help, but especially if this Act is implemented,” Mr Rowan said.